Wednesday, August 29, 2012

Facebook Provides New Mobile Advertising Capabilities

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When Facebook took company shares public earlier this year, many felt that the lower-than-expected share costs—which dropped about 19% in the month after the initial public offering—were due, in part, to a lack of mobile advertising options. In an effort to turn public and marketer interest in their favor, Facebook has been testing new ad products including mobile and location-based targeting. 

The first test of mobile advertising efforts produced a sponsored-story “Like” ad that appeared within users’ mobile news feeds. Early reports from SocialCode, a Facebook Ads API partner, showed that clickthrough rates were higher for mobile ads than standard Facebook ads. At first glance, an average clickthrough rate of .79% for mobile, compared to .327% for desktop-only news-feeds indicates that mobile is a much better way for advertisers to interact with Facebook. 

 However, the numbers could be deceiving. SocialCode Chief Innovation Officer, Addie Conner, warns that “a substantial number of clicks on mobile ads come from users who are fumbling with their phone’s key pads and clicked mistakenly, which would help explain why the “click-to-like” ratio—or percentage of users who clicked on an ad who subsequently like the post or fan page—is lower than average for mobile.” 

The in-feed mobile ads are still in the testing phase and are not available for all advertisers. The units will be sold on a cost-per-click basis and are currently significantly more expensive than standard desktop ads. Mobile ads are averaging $7.51 per click versus the $1.62 average cost for other desktop ad options. Another mobile work-in-progress for Facebook is a location-based mobile advertising product. Facebook currently allows advertisers to target by zip code. 

The new offering would also tap into data such as physical locations from users’ postings. Carolyn Everson, Facebook’s VP of global marketing solutions said in a recent Advertising Agearticle, “Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers.” Although targeting tactics might be appealing for marketers, Facebook has already faced scrutiny from regulators over data sharing practices. 

The addition of location-based targeting could once again bring the social site heat from site users. As a brand, there are a few key questions you should ask when evaluating Facebook’s new offerings: Do you think Facebook needs to play in the mobile space in order to remain relevant to your brand? Would mobile offerings make Facebook a must-buy for your brand or just enhance your current campaign? At what point is location-based advertising an infringement on user’s privacy—and at what point are you no longer comfortable with targeting capabilities? 

There’s a lot of potential with Facebook’s new offerings. Brands just need to decide how best to take advantage of them.


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